Ensuring your income is protected from long-term illness is a vital part of any financial plan. Despite this, Income Protection is often overlooked leaving many clients vulnerable. Like all protection plans it is preferable to be able to put Income Protection plans in force as soon as possible. This can ensure that the client is covered from the earliest possible date and reduces the risk of NTU’s where the client loses interest due to long delays. One such cause of delays can be where medical underwriting is required and medical evidence is requested.
This week we will be analysing the non-medical underwriting limits of Income Protection providers to explore which insurers can best help get cover in force quickly. These limits are the maximum level of sum assured which providers will insure a client for without automatically requesting medical evidence.
Limits will differ depending on the age of the client, with lower limits being applied to older clients. Providers will place client’s in an age bracket by either using their current age or the age they will attain at their next birthday. This is particularly important to understand when considering whether medical evidence will be required. The chart below details which basis different providers use.
For each age-band most providers will place a different underwriting limit. Our research highlights that there are some significant differences between each provider’s limits. The graph below shows the monthly amount of Income Protection that would trigger a need for evidence from 30, 40 and 50-year olds. All providers below apply the same limits regardless of the deferment period selected except for Vitality, who have reduced limits for their 7-day deferment plans.
Medical evidence can be requested in various forms. Different underwriting limits will often apply for different forms of evidence with Nurse’s medicals (mini medicals) often the first items to be requested.
General Practitioner reports will provide the insurer with the client’s medical history gathered by their GP. The timescale for retrieving a GPR can vary dramatically from GP to GP, sometimes causing large delays in getting the plan on risk. Medical practices are generally highly resistant to being chased by advisers to return GPRs. One technique that can work to expedite medicals from slow doctors is to ask the client to make an appointment to see the doctor so they can ask the doctor to fill in the forms while they are with them. In such situations it is essential to make sure the medical papers have been issued to the GP in advance.
The following graph shows the limits providers place on each of the above forms of evidence.
Medical requests can take two forms, a nurses or doctors. A Nurses medical often involves the client taking part in simple tests such as blood pressure and cholesterol measurements. The tests will be carried out by a nurse who will visit the client at their home or place of work. A doctors medical will be carried out by a doctor which can often be the clients own GP. It will usually consist of more tests and can be targeted at a specific condition if disclosures are made on the application. Whilst these medicals are more invasive for the client than a GPR, the medical (especially nurses) can generally be organised and completed within a few days and hence is often a faster method of obtaining evidence.
Below we look at what monthly benefit amount each insurer will request a medical for three different ages.
Overall, for advisers looking to get large Income Protection plans on risk quickly with minimum client involvement, The Exeter’s non-medical underwriting limits make theirs an appealing proposition, especially for clients below 42 for whom medical evidence will never be automatically requested. AIG and Legal & General will not automatically request a GPR, which will also be advantageous for many.